It also uses a new web browser called Amazon Silk, designed to "extend the boundaries of the browser" by coupling the capabilities of local devices "with the massive computing power, memory, and network connectivity" of the Amazon Cloud.

Watch a video explaining how Amazon Silk works below:

Launching in the US on November 15, the Kindle Fire comes with a 30-day free trial of Amazon Prime, the premium membership service that offers users free delivery of goods bought on Amazon.

No plans have been confirmed as yet for a UK release, but should the Kindle launch model be followed then it is expected that the Kindle Fire will hit British stores in early 2012.

Expectations are already high for the Kindle Fire, with Forrester research estimating that it will sell between 3m and 5m units in its first year. Amazon's share price jumped 3% in trading earlier today ahead of the product's announcement.

Also at the event, Amazon announced the Kindle Touch, a new e-reader featuring a black and white touchscreen. Priced at $99, the product will have electronic ink for reading in bright light and free storage in Amazon's cloud service.

A 3G model of the Kindle Touch will cost $149, and both products will launch in the US on November 21.